by Michael V. Coyle, JD*
Most people understand that if an employer has “just cause” to fire an employee for misconduct the employee is entitled to pay up to the date of the firing and nothing more. On the other hand, if the dismissal is “without cause” the employer has to pay the employee an amount of money (severance) in lieu of the notice that the law says the employee should have received, except where reinstatement is available under a Collective Agreement or the Labour Standards Code.
But what about the situation that falls somewhere in the middle, where the employee’s misconduct is not quite bad enough to be cause for dismissal? Can the employer reduce the severance to account for the misconduct?
In employment law, that is known as “near cause”. Under the doctrine of “near cause”, it was held by some courts back in the 1980s and early 1990s, that misconduct on the part of an employee even where it falls short of cause for dismissal can still be grounds for reducing the severance.
But in 1998 the Supreme Court of Canada put an end to the doctrine of “near cause” when it overturned the Nova Scotia Court of Appeal’s decision in Dowling v. City of Halifax. The nation’s highest Court bluntly stated that, “We do not accept any argument relating to near cause.”
So the bottom line is that the employer either has “cause” for termination, in which case the employee gets nothing, or the termination is “without cause” in which case the employee is legally entitled to full pay in lieu of notice as severance, or possibly to reinstatement. There is no middle ground.
This is why it is so important – for both employers and employees – in dismissal situations to get competent advice on whether there really is what the law considers to be “cause” for dismissal. Personal opinions on the subject – by either party – no matter how strongly they are held, do not decide the matter and can, in fact be very costly. The law books are full of those cases.
The determination of whether or not there is “cause” in a particular situation is a highly specialized legal question.
For information and advice about your personal situation, please contact me.
*Michael Coyle is an experienced employment-labour relations lawyer and a neutral mediator and arbitrator based in Kentville, Nova Scotia. Information provided in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at [email protected] For more information and tips on employment and labour law issues, visit his website at www.michaelcoyle.ca
©Michael V. Coyle, 2012